Disability Insurance Limitations and Exclusions: What’s Not Covered?

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Disability insurance might not get as much importance as any other insurance plan probably because most people believe they are not going to suffer any loss of income because of a serious illness or disability. It can be a lifesaver for you and your family if you are unable to work because of a major health issue. 

However, not all disability insurance plans are the same, and neither are the policies offered by different providers. There are limitations and exclusions for every policy offered by various disability insurance services. This is done to mitigate risk and protect the providers from paying hefty claims arising from an injury or illness. 

The first step in the process is underwriting.

Underwriting

You are required to complete an application, a medical examination, and an interview (over the phone) as a part of the disability insurance application process. These include personal details and lifestyle-related information. You must also share information about your medical history. In most cases, the process will also include the collection and testing of blood and urine samples, checking your blood pressure, pulse, and height/weight. The underwriter will review the results after collating all the details. 

These Are Not Covered

Based on the results obtained from the underwriting process, you may be offered full coverage or one with exclusion or limitation. A disability coverage with an exclusion means you will get insured but the insurance will not extend to certain conditions and body parts. It may also exclude disabilities caused by specific activities.

Most insurers typically do not pay claims for illness or injury caused by the following:

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  • Criminal activities
  • Acts of war
  • Self-inflicted
  • Rebellion
  • Civil disobedience
  • Operating a vehicle under the influence 

There could be additional exclusions specific to the state of your health at present, your current occupation, and other factors such as your hobbies. Travel is another exclusion that’s common in disability insurance plans. Some insurers allow you to collect full benefits even if you live outside the country while others may limit payments to such individuals.

Other exclusions may include nervous disabilities such as depression, stress, and substance abuse-related health issues. Mental disabilities are also excluded by most providers.

An underwriter may limit the coverage you receive in some cases because of a pre-existing health issue. The benefit period may be limited to a few years instead of the normal 65 years of age. In some cases, your ability to purchase more coverage at a later date without additional underwriting may be restricted by the providers.

The Disability insurance services offered by insurance providers include healthcare professionals insurance, dentists disability insurance, and for many other types of professionals across diverse industries.

Conclusion

Disability insurance has a high value in everyone’s life. However, when you are buying a policy, make sure you look very closely at the policy’s limitations and exclusions. A few exclusions will be permanent while others may be allowed for a review after a certain period. For example, if you had a health issue and you have provided proof that the condition is in control, they might remove that clause from the exclusion list.

It is advisable to work with an independent disability insurance broker to get the best value for your investment in the disability insurance policy.

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